Trump Will RESET The US Dollar

The US dollar is too strong and Donald Trump's top economic advisor reckons it should be deliberately weakened. Now, you may think that the dollar's strength or weakness isn't really something you should worry or indeed care much about, but you'd be wrong, because this is something that will likely affect everyone's day-to-day life in some way or another. And with the dollar's strength actually rising, we need to be asking why the White House wants to weaken it, why there's a hidden balance sheet trick waiting to be triggered, and why gold could very soon be set to make a comeback. My name is Guy, and this is the Finance Bureau. Let's start with a name that almost nobody outside of finance knows, Stephen Moran. In November 2024, while he was still a private sector strategist at Hudson Bay Capital, Moran published a document titled, A User's Guide to Restructuring the Global Trading System. And the thesis was genuinely radical. You see, for decades we've been told that the dollar's status as the world's reserve currency is America's greatest privilege. The French even had a phrase for it, exorbitant privilege, the idea that the US gets to borrow cheaply and print the money that everyone else has to earn. But Moran flipped that entirely. He called it a, quote, exorbitant burden. Here's the logic, and it rests on something economists call the Triffin Dilemma. Put simply, because the whole world needs dollars to trade, the US is forced to supply them by running permanent trade deficits. That keeps the dollar structurally overvalued year after year. And an overvalued dollar makes American exports expensive, makes imports artificially cheap and slowly hollows out US manufacturing. The well-paid factory jobs disappear and the trade deficit becomes a permanent fixture. So in Moran's framing, reserve status isn't a blessing, but a curse. And the fix he proposed was to deliberately weaken the dollar. And then something significant happened. In January 2025, Moran became chair of the Council of Economic Advisers, Trump's top in-house economist. And from September 2025 through to May 2026, he served simultaneously as a Federal Reserve governor, filling the unexpired seat vacated by Adriana Kugler before stepping down when Kevin Walsh was confirmed as the new Fed chair. So the man who wrote the blueprint for weakening the dollar went straight into the two rooms where that decision would actually be made. So how exactly do you reset a currency without ever announcing it? Because you can't just hold a press conference and say, hey, the dollar is being devalued by 40 percent. Deal with it. No. Markets would shatter overnight. Instead, Moran sketched out a toolkit, and the striking thing is how many of those levers are already being pulled. The first is tariffs, used as pure leverage rather than just a revenue tool. Tariffs reduce the flow of dollars out to foreign central banks, easing the upward pressure on the currency while forcing trading partners to the negotiating table. Cooperate and you keep your access to the American market and perhaps your security guarantees as well. Refuse and the tariffs escalate. And the historical model here is the Plaza Accord of 1985, when the major economies agreed to coordinate a dollar devaluation and the dollar duly fell roughly 50 percent against the yen and the Deutsche Mark over two years. Commentators have nicknamed Moran's version as the Mar-a-Lago Accord. But there is a crucial difference because in 1985, everyone agreed voluntarily. Moran's version, though, runs on coercion with tariffs as the stick. Now, the second lever is the debt itself. There has been serious discussion around restructuring U.S. borrowing into ultra long bonds, even 100 year century bonds, which would lock in rates and push refinancing pressure decades into the future. Now, to be clear, century bonds remain a floated idea and not enacted policy. The longest bond the Treasury issues is still 30 years. But the third lever is real and very much in motion, and that is coordination between the Treasury and the Fed. Analysts who've read the paper estimate that genuinely rebalancing the trade deficit would require the dollar to fall somewhere in the region of 30 to 40 percent. And you cannot engineer a move that size unless the central bank is willing to play along. Which begs the question of how any ordinary investor is supposed to position around a currency move this deliberate, this large and this quiet. And that's exactly why you should be reading the Finance Bureau newsletter. It's absolutely free. It lands in your inbox every week. And we break down everything across global finance, commodity markets, macroeconomic trends and monetary policy so that you never miss what truly matters. All you have to do is click the link in the description or scan the QR code on your screen to get started. And now back to the single most cinematic lever in the entire toolkit, because this is the one that could be triggered almost overnight. It comes down to a number that sounds like a misprint, $42.22. That is the price at which the U.S. Treasury officially values its gold. Not the market price, but the statutory price set by law back in 1973, the last formal link between the dollar and gold before that system was abandoned. And it has not been touched in over 50 years. Meanwhile, gold on the open market right now is sitting at around $4,330 an ounce, up nearly 31 percent over the past year alone. So here is where it gets interesting. The U.S. holds roughly 261.5 million ounces of gold at that ancient statutory price. The entire national gold hoard is booked at about $11 billion. At today's market price, however, the same gold is worth around $1.13 trillion. That's a gap of roughly $1.12 trillion sitting on the books, frozen by a number from 1973. Now watch how the mechanism works. If Congress or the Treasury under existing authority simply revalues that gold to the market price, the Treasury can issue new gold certificates to the Federal Reserve at the higher value. The Fed then credits the Treasury's account with the difference. Put simply, the government conjures over a trillion dollars of new fiscal capacity with no new debt issued, no taxes raised and the gold never leaving the vault. And this is not some theoretical fantasy. Franklin Roosevelt did exactly this in 1933, revaluing gold from $20.67 to $35 an ounce, instantly expanding the government's spending power to fund the New Deal. The precedent is over 90 years old, in other words. Now, on the 1st of August 2025, the Federal Reserve published a staff note titled Official studying exactly how other countries have used gold revaluation to manage their debts. The Fed was, on paper, formally examining the mechanism. Now, some analysts push this much further and argue that if you wanted gold to fully back the currency, you would need a price north of $20,000 an ounce. I want to be clear, that figure is the speculative outer edge, the nuclear option, not mainstream analysis. We're not saying that is happening, but the mechanism underneath it is entirely real. And while retail investors stare at the dollar index, the world's biggest institutions have already cast their vote in the background. In a report published on the 2nd of June 2026, the European Central Bank revealed something extraordinary. Gold has now overtaken US Treasuries as the single largest reserve asset held by the world's central banks. Gold now sits at 27% of global reserves, while US Treasuries have slipped to 22%. A year earlier, those positions were reversed, with gold at 20% and Treasuries at 25%. As ECB President Christine Lagarde put it, quote, Now, before you get too alarmed, it's important to remember that a big chunk of that shift is just maths. Gold's price surged, so its share of reserves rose mechanically. The ECB itself notes that if you valued gold at 2023 prices, Treasuries would still be number one at 26%. But the direction of travel is undeniable. Central banks now hold more than 36,000 tonnes of gold, levels not seen since the Bretton Woods era collapsed in the early 70s. They have been net buyers every single year since 2010. And the clearest signal comes from one country in particular. China's holdings of US Treasuries have fallen to $652.3 billion as of March 2026, the lowest level since September 2008. At their peak in 2013, China held roughly $1.3 trillion worth of US debt, so they have, in effect, now halved their exposure to it. Analysts describe it bluntly as sanctions-proofing, a response to the West freezing Russian reserves in 2022, which proved that dollar assets can be weaponised. So, the institutions are de-dollarising on the quiet, while the headlines obsess over a collapse that isn't coming. Which brings us to the date, the one piece of this that turns a slow trend into a countdown. Judy Shelton, a long-time gold advocate and former Trump advisor, has proposed something called Treasury Trust Bonds. These are 50-year bonds where, at maturity, the holder can choose to be repaid in either dollars or in a fixed weight of gold. A soft reintroduction of gold into the system through the backdoor. And the date Shelton has floated for issuing them is 4th July 2026, America's 250th birthday. Now, this is a proposal, not confirmed policy, but consider why the pressure for something like this is mounting. The US national debt now stands at $39.16 trillion. The annual interest bill alone has blown past $1 trillion a year. That is roughly $3 billion every single day just to service the debt, before anything else gets paid for. Interest payments have now surpassed defence spending to become one of the federal budget's biggest line items, second only to Social Security, and are on track to overtake Medicare entirely by 2028. A government drowning in debt that cannot inflate it away and cannot grow its way out has very few options left. A quiet reset, using gold it already owns, starts to look less like a conspiracy theory therefore and more like a balance sheet necessity. But let's keep some perspective here, because despite all the warning signs, the dollar is not dying right now, and indeed the dollar index, or DXY, is sitting at 100.07, up just over 1% on the year. The 30-year treasury yield is sitting at 5.01%, having recently touched 5.2%, a 19-year high in late May 2026, a level that reflects continued demand pressures on long-dated US debt. And the Fed has turned hawkish, not soft. In May 2026, Kevin Walsh was confirmed as the new Fed chair by a Senate vote of 54-45, and he has openly called for, quote, regime change at the central bank and a radical shrinking of its bloated $6.7 trillion balance sheet. Goldman Sachs, JP Morgan and MUFG all entered this year forecasting the dollar in the low 90s. Every one of them was wrong. And the collapse crowd keeps getting it wrong because they're watching the wrong screen. You see, a strengthening dollar and a reset agenda actually work hand in hand, because a chaotic collapse would destroy confidence and strip America of all its leverage. A managed reset needs the dollar to look healthy on the surface while the plumbing is rebuilt underneath. Miran himself has admitted that the dollar cannot simply be crashed and that it requires, quote, gradualism or coordination with allies or the Federal Reserve. The strength, you see, actually provides the necessary cover for this reset to happen. So this is where it lands on you, because if the dollar is deliberately devalued, the real cost will be measured directly in your lost purchasing power. A weaker dollar means more expensive imports, stickier inflation and a quiet erosion of every dollar sitting in your savings account. The revaluation of gold doesn't show up on the news. It shows up as the slow rise in the cost of everything you buy. The institutions buying 36,000 tons of gold are hedging against exactly that outcome. While the ordinary saver holds cash and watches it lose value in real terms. This is the most regressive tax there is, and almost nobody voted for it. So the era of taking a strong, stable dollar for granted is coming to an end. While a collapse happens by accident and everyone sees it, a reset, by contrast, is a quiet, deliberate choice documented in policy papers and executed deep inside gold vaults. The architects have names, the toolkit has levers already being pulled and the gold sitting under Fort Knox is still booked at a price from 1973 just waiting. Those central banks and institutions that started buying gold years ago will be sitting pretty, while the savers who never realised the rules were being rewritten beneath them are the ones set to lose out. But what do you think? Does this reset actually arrive on schedule? A soft return to gold dressed up as a birthday celebration on the 4th of July? Or do the strengthening dollar and a hawkish Fed under Kevin Walsh hold the line and keep the whole agenda parked indefinitely? Let me know your thoughts in the comments down below. And if you want to understand how the entire fiat system was built and why it keeps reaching for gold in moments like this, then you can check out our full breakdown of that history right over here. That's all from me for today, though. So as always, thank you for watching and I'll see you in the next one. This is Guy signing off.